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Tata Sons’ new chairman Natarajan Chandrasekaran has sought to end a dispute that blighted his ousted predecessor’s last months in power, by overseeing an “in principle” agreement to pay $1.18bn to Japan’s NTT DoCoMo.
The dispute arose after DoCoMo sought to invoke an agreement under which Tata Sons had agreed to buy out its 26 per cent stake in Tata Teleservices, the Indian conglomerate’s struggling telecom business.
The Reserve Bank of India ruled that this transaction would breach foreign exchange restrictions, prompting DoCoMo to successfully seek an international arbitration award, which it then sought last year to have enforced in India, as well as the US and UK.
On Tuesday, Tata Sons said it had reached an agreement in principle that would allow the enforcement of the award in India – without giving any details of how the agreement would increase the likelihood of RBI approval.
Under the terms of the deal, Tata on Tuesday withdrew its objections to the enforcement of the award by the Delhi High Court – which, Tata insiders had previously said, it raised only because of fears that enforcement in India could lead to the seizure of Tata assets abroad. Following the withdrawal of Tata’s objections, the court has adjourned the case until March 8, when it will consider the RBI’s latest position on the matter.
In return, DoCoMo has agreed to suspend its US and UK action. The agreement is one of the first actions to take place under Mr Chandrasekaran, former chief executive of group flagship Tata Consultancy Services, who took charge of the holding company on February 21.